US Government Review of Nvidia’s H200 Chip Exports to China Underway

A multi-agency review process for Nvidia's proposed H200 artificial intelligence chip exports to China has been initiated by the Trump administration. License applications have been forwarded by the US Commerce Department to the State, Energy, and Defense Departments for evaluation. These agencies now have a 30-day window to assess the potential shipments.

Despite the regulatory scrutiny, optimism on Wall Street remains. Three leading analysts have recently reaffirmed buy ratings, with price targets set at $275 per share.

Following a virtual meeting with Nvidia's investor relations team, Bank of America's Vivek Arya cited the company's confidence in its Blackwell-based language models, scheduled for launch in early 2026. Bernstein's Stacy Rasgon noted that the $500 billion demand projection for Blackwell, Rubin, and networking products in 2025 and 2026 does not yet account for newer agreements, such as partnerships with Anthropic and OpenAI. Separately, Jefferies analyst Blayne Curtis raised his earnings per share estimates to $7.82 for 2026 and to $9.50 for 2027.

Valuation Metrics and Recent Performance

Nvidia's valuation has seen a notable contraction. The stock currently trades at approximately 25 times expected 2026 earnings and 19 times 2027 estimates. This results in a price-to-earnings-to-growth (PEG) ratio of just 0.5, significantly below the average of 2.0 for comparable growth stocks. The price-to-sales ratio has also declined, falling from 30.2 in the third quarter to around 23.3 currently.

Should investors sell immediately? Or is it worth buying Nvidia?

For its third fiscal quarter of 2026, Nvidia reported revenue of $57.0 billion and net income of $31.9 billion. The data center segment was the primary contributor, generating $51.2 billion. Looking ahead, the company has provided fourth-quarter revenue guidance of $65.0 billion.

The company is scheduled to report its fourth fiscal quarter results on February 25, 2026. Investors are likely to focus on management commentary regarding supply, demand, the China business, and the transition from the Blackwell to the Rubin platform.

Deal Specifics and Geopolitical Context

The review follows President Trump's December 8th announcement permitting H200 shipments to approved Chinese customers, contingent on a 25% fee levied on the sale price. A government official emphasized that the current examination will be "thorough" and is "not a procedural formality." The final authorization rests with President Trump.

It is important to note that Chinese authorities are also conducting their own review to determine whether domestic firms will be permitted to purchase the chips. The H200 is Nvidia's second-most powerful AI chip model and offers a significant performance advantage over the China-specific H20, delivering roughly six times the computational power for AI applications.